ANAO backs Australia’s Future Submarine acquisition

A report on the Australian government’s handling of the Future Submarine acquisition was complimented by the Australian National Audit Office (ANAO) in a report released on April 27.

Commenting on the report, Australia’s Minister for Defence Industry said the ANAO has independently verified that the competitive evaluation process to select an international partner for the Future Submarine Program was effectively designed and implemented.

On 26 April 2016, the Australian government announced that DCNS had been selected as Australia’s international partner for the construction of 12 new submarines. The new submarines are to replace Australia’s current six Collins-class submarines, first of which is set to retire in 2026.

While being overall complimentary, the report noted that the choice of a single partner for work on the concept and preliminary design phase carried certain risks. According to ANAO, selecting one partner for the design phase “removes competition in the design phase, and removes incentives for the international partner (DCNS) to produce a more economical and efficient build.”

“This places the onus on Defence to ensure that its approach to the Future Submarine’s design and build phases, where final costs and schedules will be determined, returns value-for-money to the Commonwealth in the absence of a competitive process,” the report further said.

According to the government, design of the Future Submarine will continue until 2026 while the construction is expected to start in 2022–23 once 85 per cent of the design is completed.

All three participants of the competitive evaluation process, French DCNS, German TKMS and the Japanese government, received around AU$8 million for their participation, the report revealed.